Tag: Richard Rumelt

Strategy vs. Tactics: What’s the Difference and Why Does it Matter?

In order to do anything meaningful, you have to know where you are going.

Strategy and tactics are two terms that get thrown around a lot, and are often used interchangeably in numerous contexts. But what exactly do they mean, what is the difference, and why is it important? In this article, we will look at the contrast between strategy and tactics, and the most effective ways to use each.

While strategy and tactics originated as military terminology, their use has spread to planning in many areas of life. Strategy is overarching plan or set of goals. Changing strategies is like trying to turn around an aircraft carrier—it can be done but not quickly. Tactics are the specific actions or steps you undertake to accomplish your strategy. For example, in a war, a nation’s strategy might be to win the hearts and minds of the opponent’s civilian population. To achieve this they could use tactics such as radio broadcasts or building hospitals.  A personal strategy might be to get into a particular career, whereas your tactics might include choosing your educational path, seeking out a helpful mentor, or distinguishing yourself from the competition.

We might have strategies for anything from gaining political power or getting promoted, to building relationships and growing the audience of a blog. Whatever we are trying to do, we would do well to understand how strategy and tactics work, the distinction, and how we can fit the two together. Without a strategy we run the risk of ambling through life, uncertain and confused about if we are making progress towards what we want. Without tactics, we are destined for a lifetime of wishful thinking or chronic dissatisfaction. As Lawrence Freedman writes in Strategy: A History, “Without a strategy, facing up to any problem or striving for any objective would be considered negligent. Certainly, no military campaign, company investment, or government initiative is likely to receive backing unless there is a strategy to evaluate…. There is a call for strategy every time the path to a given destination is not straightforward.” And without tactics you become dependent on pure luck to implement your strategy.

To achieve anything we need a view of both the micro and the macro, the forest and the trees—and how both perspectives slot together. Strategy and tactics are complementary. Neither works well without the other. Sun Tzu recognized this two and a half millennia ago when he stated, “Strategy without tactics is the slowest route to victory. Tactics without strategy are the noise before defeat.” We need to take a long-term view and think ahead, while choosing short-term steps to take now for the sake of what we want later.

The Relationship Between Strategy and Tactics

Any time we decide on a goal and invest resources in achieving it, we are strategizing. Freedman writes:

One common contemporary definition describes it as being about maintaining a balance between ends, ways, and means; about identifying objectives; and about the resources and methods available for meeting such objectives. This balance requires not only finding out how to achieve desired ends but also adjusting ends so that realistic ways can be found to meet them by available means.

In The Grand Strategy of the Roman Empire, Edward N. Luttwak writes that strategy “is not about moving armies over geography, as in board games. It encompasses the entire struggle of adversarial forces, which need not have a spatial dimension at all….” When you think about winning a war, what does it mean to actually win? History is full of examples of wars that were “won” on paper, only to be restarted as soon as the adversary had time to regroup. So being precise in your goal, to encompass the entirety of what you want to achieve, is necessary to articulate a good strategy. It’s not about success in the moment, but success in the long term. It’s the difference between the end of WWI and WWII. World War I was about winning that war. World War II was about never fighting a war like that again. The strategies articulated and pursued by the Treaty of Versailles and the Marshall Plan were full of markedly different tactics.

In Good Strategy, Bad Strategy, Richard Rumelt writes: “The most basic idea of strategy is the application of strength against weakness. Or if you prefer, strength applied to the most promising opportunity…A good strategy doesn’t just draw on existing strength; it creates strength.” Rumelt’s definition of strategy as creating strength is particularly important. You don’t deplete yourself as you execute your strategy. You choose tactics that reinforce and build strength as they are deployed. Back to winning hearts and minds – the tactics require up-front costs. But as they proceed, and as the strategy unfolds, strength and further support are gained by having the support of the local population. A good strategy makes you stronger.

“Grand strategy is the art of looking beyond the present battle and calculating ahead. Focus on your ultimate goal and plot to reach it.”

― Robert Greene, The 33 Strategies of War

The Components of Strategy

The strategic theorist Henry Mintzberg provides a useful approach to thinking about strategy in adversarial situations. According to Mintzberg, there are five key components or types:

  1. Plan: A consciously chosen series of actions to achieve a goal, made in advance.
  2. Ploy: A deliberate attempt to confuse, mislead or distract an opponent.
  3. Pattern: A consistent, repeated series of actions that achieve the desired result.
  4. Position: A considered relationship between an entity (organization, army, individual etc) and its context.
  5. Perspective: A particular way of viewing the world, a mindset regarding actions that lead to a distinct way of behaving.

Geoffrey P. Chamberlain offers a slightly different perspective on the components of strategy, useful when the strategy is more about a personal goal. He identifies seven parts:

  1. A strategy is used within a particular domain.
  2. A strategy has a single, well defined focus.
  3. A strategy lays out a path to be followed.
  4. A strategy is made up of parts (tactics).
  5. Each of a strategy’s parts pushes towards the defined focus.
  6. A strategy recognises its sphere of influence.
  7. A strategy is either intentionally formed or emerges naturally.

According to Rumelt, a strategy must include “premeditation, the anticipation of others’ behavior, and the purposeful design of coordinated actions. As a general rule, strategy is more important in situations where other parties have the potential to thwart or disrupt actions, or where our plans are at risk if we don’t take meaningful steps to achieve them. Good strategy requires us to both focus on a goal, and anticipate obstacles to reaching that goal.  When we encounter obstacles, we may need to employ what Freedman calls “deceits, ruses, feints, manoeuvres and a quicker wit”—our tactics.

“The skillful tactician may be likened to the Shuai-Jan. Now the Shuai-Jan is a snake that is found in the Ch’ang mountains. Strike at its head, and you will be attacked by its tail; strike at its tail, and you will be attacked by its head; strike at its middle, and you will be attacked by head and tail both.”

— Sun Tzu, The Art of War

A Few Words on Tactics

Even the most elegant, well-planned strategy is useless if we do not take thoughtful steps to achieve it. While the overall goal remains stable, the steps we take to achieve it must be flexible enough to adjust to the short-term realities of our situation.

The word “tactic” comes from the Ancient Greek “taktikos,” which loosely translates to “the art of ordering or arranging.” We now use the term to denote actions toward a goal. Tactics often center around the efficient use of available resources, whether money, people, time, ammunition, or materials. Tactics also tend to be shorter-term and more specific than strategies.

Many tactics are timeless and have been used for centuries or even millennia. Military tactics such as ambushes, using prevailing weather, and divide-and-conquer have been around as long as people have fought each other. The same applies to tactics used by politicians and protesters. Successful tactics often include an ‘implementation intention’—a specific trigger that signals when they should be used. Simply deciding what to do is rarely enough. We need an “if this, then that” plan for where, when and why. The short-term nature and flexibility of tactics allow us to pivot as needed, choosing the right ones for the situation, to achieve our larger, strategic goals.

If you don’t have a strategy, you are part of someone else’s strategy.”

— Alvin Toffler

Conclusion

Although often regarded as interchangeable, strategy and tactics are somewhat different, though complementary concepts. According to the skilled strategist Sun Tzu, strategy is about winning before the battle begins, while tactics are about striking at weakness. Both are ancient concepts that have come to be an essential part of numerous disciplines and offer endless new ways of thinking.

A Primer on Strategy

Good-Strategy-Bad-Strategy

There are many good reasons to read Good Strategy Bad Strategy by Richard Rumelt.

You may be frustrated by the state of your organization’s strategy. You may be interested in identifying the characteristics of good strategy. Or you may want to learn how to identify the elements of a bad strategy.

A leader’s most important responsibility is identifying the biggest challenges to forward progress and devising a coherent approach to overcoming them. In contexts ranging from corporate direction to national security, strategy matters. Yet we have become so accustomed to strategy as exhortation that we hardly blink an eye when a leader spouts slogans and announces high-sounding goals, calling the mixture a “strategy.”

Complexity

“A hallmark of mediocrity and bad strategy,” Rumelt writes, “is unnecessary complexity—a flurry of fluff masking an absence of substance.” Most bad strategies are nothing more than statements of desire. And if you read them closely, the goals often contradict one another.

This book should be required reading for managers and executives alike.

The Strategy Retreat

I’m sure this excerpt sounds familiar to many of you:

The event was a “strategy retreat.” The CEO had modeled it on a similar event at British Airways he had attended several years before. About two hundred upper-level managers from around the world gathered in a hotel ballroom where top management presented a vision for the future: to be the most respected and successful company in their field. There was a specially produced motion picture featuring the firm’s products and services being used in colorful settings around the world. There was an address by the CEO accompanied by dramatic music to highlight the company’s “strategic” goals: global leadership, growth, and high shareholder return. There were breakouts into smaller groups to allow discussion and buy-in. There was a colorful release of balloons. There was everything but strategy.

Good strategy is the exception not the rule. Rumelt argues that the bad strategy problem is only growing. Even worse, more and more leaders think they have a strategy when they do not—they have a bad strategy. Bad strategy, “ignores the power of choice and focus, trying instead to accommodate a multitude of conflicting demands and interests.” Sounds familiar?

What is a bad strategy?

Bad strategy is long on goals and short on policy or action. It assumes that goals are all you need. It puts forward strategic objectives that are incoherent and, sometimes, totally impracticable. It uses high-sounding words and phrases to hide these failings.

Underperformance is a result

When a leader characterizes the challenge as underperformance, it sets the stage for bad strategy. Underperformance is a result. The true challenges are the reasons for the underperformance.

Good Strategy

Good strategy is not just “what” you are trying to do. It is also “why” and “how” you are doing it. … Good strategy requires leaders who are willing and able to say no to a wide variety of actions and interests. Strategy is at least as much about what an organization does not do as it is about what it does.

Strategy is not vision or ambition

Despite the roar of voices wanting to equate strategy with ambition, leadership, “vision,” planning, or the economic logic of competition, strategy is none of these. The core of strategy work is always the same: discovering the critical factors in a situation and designing a way of coordinating and focusing actions to deal with those factors. A leader’s most important responsibility is identifying the biggest challenges to forward progress and devising a coherent approach to overcoming them. In contexts ranging from corporate direction to national security, strategy matters.

The core of strategy has three elements:

The kernel of a strategy contains three elements: a diagnosis, a guiding policy, and coherent action. The guiding policy specifies the approach to dealing with the obstacles called out in the diagnosis. It is like a signpost, marking the direction forward but not defining the details of the trip. Coherent actions are feasible coordinated policies, resource commitments, and actions designed to carry out the guiding policy.

Coherence of design

A good strategy doesn’t just draw on existing strength; it creates strength through the coherence of its design. Most organizations of any size don’t do this. Rather, they pursue multiple objectives that are unconnected with one another or, worse, that conflict with one another.

Coordination is costly and hard.

Coordination is costly, because it fights against the gains to specialization, the most basic economies in organized activity. To specialize in something is, roughly speaking, to be left alone to do just that thing and not be bothered with other tasks, interruptions, and other agents’ agendas. As is clear to anyone who has belonged to a coordinating committee, coordination interrupts and de-specializes people.

Good strategy is actually surprising.

Most complex organizations spread rather than concentrate resources, acting to placate and pay off internal and external interests. Thus, we are surprised when a complex organization, such as Apple or the U.S. Army, actually focuses its actions. Not because of secrecy, but because good strategy itself is unexpected.

Focus, however, is hard. It means saying no to individuals, groups, and even entire lines of business.

The inside view describes the fact that people tend to see themselves, their group, their project, their company, or their nation as special and different.

Increasing value …

In particular, increasing value requires a strategy for progress on at least one of four different fronts: deepening advantages, broadening the extent of advantages, creating higher demand for advantaged products or services, or strengthening the isolating mechanisms that block easy replication and imitation by competitors.

Unfinished Thought

As I was reading this book I kept wondering why organizations were so reluctant to employ a strategy. All of this thinking reminded me of another book I had read a few years back on strategy called The Strategy Paradox.

What is the paradox?

The most profitable strategies are “extreme” strategies that commit companies to positions of either product differentiation or cost leadership. These extreme positions expose firms to a greater likelihood of bankruptcy by increasing the strategic risk they face. Consequently, the strategies likeliest to succeed are also likeliest to fail. That is the strategy paradox.

At first I thought that maybe organizations avoided good strategy simply because it was complicated and involved hard choices. The more I thought about it, however, the more I settled on the fact that people avoid good strategies because they don’t want to be wrong.

When Steve Jobs took over Apple, he did the unexpected.

What he did was both obvious and, at the same time, unexpected. He shrunk Apple to a scale and scope suitable to the reality of its being a niche producer in the highly competitive personal computer business. He cut Apple back to a core that could survive.

Steve Jobs talked Microsoft into investing $150 million in Apple, exploiting Bill Gates’s concerns about what a failed Apple would mean to Microsoft’s struggle with the Department of Justice. Jobs cut all of the desktop models—there were fifteen—back to one. He cut all portable and handheld models back to one laptop. He completely cut out all the printers and other peripherals. He cut development engineers. He cut software development. He cut distributors and cut out five of the company’s six national retailers. He cut out virtually all manufacturing, moving it offshore to Taiwan. With a simpler product line manufactured in Asia, he cut inventory by more than 80 percent. A new Web store sold Apple’s products directly to consumers, cutting out distributors and dealers.

What is remarkable about Jobs’s turnaround strategy for Apple was how much it was “Business 101” and yet how much of it was unanticipated.

In May 1998, shortly after taking over Apple, Jobs explained the substance and coherence of his actions:

The product lineup was too complicated and the company was bleeding cash. A friend of the family asked me which Apple computer she should buy. She couldn’t figure out the differences among them and I couldn’t give her clear guidance, either. I was appalled that there was no Apple consumer computer priced under $2,000. We are replacing all of those desktop computers with one, the Power Mac G3. We are dropping five of six national retailers—meeting their demand has meant too many models at too many price points and too much markup.

Jobs’s actions were both focused and decisive and, in hindsight, correct. Everyone at the time was surprised because they expected the fluffy goals and vacuous promises typical of most executives. But Jobs’s back-to-business 101 approach was correct. Jobs had a sick business and he needed to fix it.

While Jobs’s turnaround at Apple was impressive it wouldn’t enable Apple to become more than a niche player in an industry dominated by network effects. In 1998 Rumelt had a chance to ask Jobs “What is the strategy?” Jobs responded simply “I am going to wait for the next big thing.”

This encounter struck Rumelt as different. Everywhere he went and everyone he talked to just spewed the same clichés about their strategy — network relationships, adopt best practices, etc.

Rumelt writes:

Jobs did not enunciate some simple-minded growth or market share goal. He did not pretend that pushing on various levers would somehow magically restore Apple to market leadership in personal computers. Instead, he was actually focused on the sources of and barriers to success in his industry—recognizing the next window of opportunity, the next set of forces he could harness to his advantage, and then having the quickness and cleverness to pounce on it quickly like a perfect predator. There was no pretense that such windows opened every year or that one could force them open with incentives or management tricks. He knew how it worked. He had done it before with the Apple II and the Macintosh and then with Pixar. He had tried to force it with NeXT, and that had not gone well. It would be two years before he would make that leap again with the iPod and then online music. And, after that, with the iPhone.

Steve Jobs’s answer that day—“to wait for the next big thing”—is not a general formula for success. But it was a wise approach to Apple’s situation at that moment, in that industry, with so many new technologies seemingly just around the corner.

In hindsight we know Jobs’s strategy worked but it could have just as easily backfired. The turnaround might have failed and landed Apple, now the world’s largest company, in bankruptcy. Apple’s strategy at the time wasn’t easy to like — in fact, many people thought he was wrong. I imagine that Jobs would have been ok with being wrong — he was more worried about being mediocre.

We equate strategy with success but they are different things.

Real strategies—good strategies—can be wrong. And we don’t want to be wrong. We’re playing not to lose rather than playing to win. We all know how it feels to make a mistake — we’d rather watch other people make mistakes than make them ourselves. So we seek consensus because it’s safe.

Yet consensus, when you think about it, is almost assured to fail. It’s making everyone happy and alienating no one.

Consensus is the opposite of marshalling your resources towards a coordinated approach. And consensus, by definition, almost certainly assures a bad strategy because it doesn’t make any choices. It’s a sprinkle of this and a dash of that — it’s something for everyone. Rather than risk being wrong, we hide behind puff that makes everyone happy. That’s bad strategy.

The beauty of Good Strategy Bad Strategy is that it calls out the vast majority of public and private organizations that have horrible strategies. The bad news is that things are unlikely to change. After all, no one ever got fired for having a strategy to “increase the percentage of high school graduates.” It’s hard to argue with that as a goal but let’s stop calling it a strategy.

If you’re interested in learning more, watch this video of Richard Rumelt presenting at the London School of Economics:

There are plenty of good strategies out there. Lou Gestner developed one when he took over IBM in 1993 (for details see Gestner’s book — Who Says Elephants Can’t Dance?: Leading a Great Enterprise through Dramatic Change). He understood the problem and devised an approach that marshalled the organization towards dealing with the problem.

If you’re still curious, read the entire book.